In 2005, Foamex International Inc., the largest manufacturer of foam for the automotive industry and consumer products, filed for bankruptcy protection. The company's next step was to raise prices by more than 40 percent in an attempt to cover the rising costs of its raw materials. This bold move led to a dramatic turnaround in the company's financial performance. Soon creditors were battling for equity in the newly reorganized Foamex; meanwhile, several of the world's largest hedge funds were building up substantial stakes in its depressed stock, making the restructuring process more complex. This case teaches students how a firm can manage the claims of creditors and equity holders as it attempts to salvage its future.